Price of rapid test kits capped at Rs 400 each; HC says private gains cannot be a priority

Rapid test kit imported by Matrix Lab has been capped at Rs 400 each by the Delhi High Court and it includes the GST. It has come down further from Rs 600, which was approved by the Indian Council of Medical Research (ICMR).

Rare Metabolics and Aark Pharmaceuticals, which was seeking the release of test kits by Matrix Labs, the importer of the kits, had moved the HC. Rare Metabolics said that Matrix was seeking full payment upfront before delivering the 7.24 lakh kits ordered by them.

Justice Najmi Waziri while capping the price of the medical kits said that, "For the people to be assured that the pandemic is under control and for the governments to ensure, and for agencies engaged in the frontline battle to safeguard people's health, more kits/tests should be made available urgently at the lowest cost throughout the country."

The court stated that a profit of Rs 155 on the actual cost price of the kit, which is Rs 245, is anyways high and is sufficient for the seller. This capping was the need of the hour, especially keeping in mind the ongoing pandemic, the Court said.

The Court was of the view that public good has to take priority in these testing times. The country is facing an unprecedented medical crisis and private gain should be the last on someone's mind right now, said the Court.

The single bench of Justice Najmi Waziri said, "The litigation between the parties should give way to the larger public good. In view of the above, the kits/tests should be sold at a price not beyond Rs 400 each."

It should be noted that this order will not affect price of the kits to be sold to ICMR and the Tamil Nadu government, as they had placed the original orders.

About 10 lakh kits were ordered initially and 50 per cent of them were for the ICMR. Out of the five lakh meant for ICMR, 2.76 lakh were delivered. After giving the first delivery, the importer stated that it won't deliver the remaining kits till it received full payment.

According to the petitioner companies, they had paid Rs 12.75 crore for the import of 5 lakh test kits at Rs 600 each. The agreement stated that the remaining amount was supposed to be given to the importer after ICMR released the payment.

After hearing both sides, the court said that Covid-19 tests "are required in the country on urgent basis" and directed that the remaining 2.24 lakh of the 5 lakh kits be delivered to ICMR the moment they arrive in India.

The court also directed that the remaining amount of Rs 8.25 crore (at Rs 600 per kit) should be paid to Matrix within 24 hours of receiving payment from ICMR by the petitioner companies.